The threat of class action lawsuits is deterring companies from US public listings, with litigation risk topping a Bloomberg Intelligence survey of over 150 executives. The report found that fewer companies than ever are pursuing IPOs, with regulatory burdens and the complex listing process also cited as major obstacles. This trend has contributed to a 50% decline in US-listed public companies since their 1996 peak.

SpaceX's planned June IPO and other large tech offerings may help reverse the market's slump, but companies of all sizes face potential lawsuits shortly after going public. Survey participants described this as a "listings tax" triggered by price volatility regardless of underlying misconduct. The current securities litigation structure could incentivize frivolous lawsuits, some executives warned.

Private equity firms are increasingly avoiding investments that rely on public exits due to IPO concerns, according to Bloomberg Intelligence's Larry Tabb. While policymakers including the SEC are working to address excessive regulation, proposed changes like bi-annual reporting and scaled-back disclosures may not be enough. The bipartisan INVEST Act could help reinvigorate public markets, but comprehensive reform will likely require Congressional action.